Survey: CU CEOs see car loans as ‘best opportunity’

AUG. 11, 2015 -- Credit union chief executives see auto lending as their best opportunity for loan growth and focus over the next 12 months, with mortgage lending not far behind, according to survey results released Tuesday by TransUnion.

According to the survey of 90 credit union CEOs, auto loans were ranked number one by 48% of credit union executives, and in the top three of a group of 12 loans by 81% of the respondents, in terms of loan growth, focus and opportunity over the next year.

Mortgage loans (of all types) were ranked as the top area of growth/opportunity/focus by 26% of the respondents (with 60% identifying the loans as within the “top three” of loan categories). Credit cards were ranked as the top area by only 8% pf the executives, but 46% placed cards in the top three.

The TransUnion report also stated that – from first quarter, 2014 to first quarter 2015 – new auto loans by credit unions rose by 7.4%, compared to a 2.1% increase among all financial institutions. Among the loans, only 12.5% were subprime during the first quarter of 2015. "Credit unions continue to be relatively conservative compared to the rest of the industry with approximately half the size of the subprime auto lending market," according to TransUnion. “Credit union delinquency rates are half the rate of the rest of the industry, which is a reflection of how credit unions manage risk distribution in this market."

On the mortgage side, TransUnion said its data show credit union originations decreased 24% between 2012 and 2014, but then increased 35% in the period of first quarter 2014 to first quarter 2015. The rest of the mortgage origination market, the company said, experienced only 15% growth in the same period.

Among non-prime mortgage originations, TransUnion said, credit unions grew by 25% in the first quarter of 2015, “while the rest of the industry grew at 4%.”

"Historically, credit unions have seen lower delinquency rates than the rest of the industry, and their focus on membership expansion makes them well-positioned to take advantage of this growth," TransUnion said in a release.